Dorothy Nakaweesi
19 August 2008
Central region and Kampala in particular have been identified as the most notorious for tax evasion and smuggling of goods. In an annual report ending June, Uganda Revenue Authority (URA) reports that of all the regions in the country, the central has 49 per cent revenue risk.
"All smuggled and genuinely imported goods from bordering countries try to find their way into the central region because of its location and populous nature thus making it the most revenue risky area," the Commissioner General of URA, Ms Allen Kagina, said while releasing the report at URA offices in Nakawa, last week. The results underscore the need for measures to curb business fraud in Kampala and the central region.
Despite a 12 per cent decline in revenue recovered last financial year, URA recovered Shs6.7 billion after carrying out 4,039 seizures up from 2,840 seizures in which it recovered Shs7.6 billion the previous year.
Ms Kagina said the decline was an indicator of general improvement in the compliance levels in the Financial Year 2007/08 compared to Financial Year 2006/07. The main means of smuggling is through passenger and cargo vehicles to Kampala, some through Lake Victoria, others by rail and Entebbe International Airport.
Items mostly smuggled include polythene bags, wines and spirits, cosmetics and super match cigarettes, textile materials, car batteries and dry cells, sugar, fuel and counterfeit Kiwi shoe polish.
The eastern border with Kenya ranked second at 43 per cent with smuggling and tax evasion occuring especially around a 568-kilometre stretch from Majanji in Busia District at the borders of Lake Victoria, through Busia town, Amungura, Malaba in Tororo District, Lwakhakha in Mbale District, through mountain Elgon, Bukwa border, in Kapchorwa District, to Kotido in Karamoja region.
Ms Kagina said part of this stretch is extremely hilly and has harsh terrain making it easier for tax-evaders to easily escape. "The eastern region is posed with a big challenge of outright smuggling due to the industrialised nature of the economy of Kenya, compared to the infant industries in Uganda," Ms Kagina said.
Goods from the Middle East and Far East, which arrive at Eldoret Airport by air are later smuggled into the country on bicycles and vehicles, via the railway transport and on through Lake Victoria by organised groups.
The south-western border ranked third at 6 per cent with neighbouring United Republic of Tanzania, Rwanda, and Democratic Republic of Congo (DRC) being the main source of smuggled goods.
The northern region border between Uganda and southern Sudan and DRC registered the least cases of revenue risk partly because it borders none-economically active regions of southern Sudan and eastern DRC.
Smuggling in these regions is as a result of returning to Uganda merchandize, formally meant for the consumption in those economies.
According to URA findings, 60 per cent of the revenue prevented is contributed from the gazetted areas, 25 per cent from out right smuggling and 15 per cent from other nature of offences.
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